DEVELOPMENT STUDIES

DIFFERENT STEPS OF DEVELOPMENT

STUDIES

• The process of development studies

Basic
Prospect Preliminary Concept Pre-project
Engineering

Output: Output: Output: Output: Output:

Assessment Assessment Evaluation of Definition of Full description
of concept
of profitability of feasibility the different project
concepts, and
selection of the
    most optimal  

Handover to
      Construction
 1 Prospect Studies
• The prospect study aims at evaluating the commercial interest of a
geological “vision” (the prospect), not confirmed by a discovery.
• It consists of three parts, that are prepared by three different
Divisions :
• GSR: a geological study, which defines the potential hydrocarbon
accumulation and the probability of success of the exploration well,
• ARCHITECTE PETROLIER: a development study, which defines
production profiles, the extraction mode and process facilities, the
possible development architecture, its cost and schedule,
• FINANCES: an economic evaluation, which transforms fluxes of
financial resources and future product sales into different
economic Indicators.
• These three studies provide input to Management , who will decide
further action (abandonment, commercial proposition, new
studies, search for partners, etc.).
2 Preliminary Development Studies
• The preliminary development study aims at
supplying an initial economic evaluation of a
discovery, in order to make a decision on further
action (abandonment, sale of interest, conventional
appraisal, long duration test production, additional
studies, etc.).
• The preliminary development study does not seek
to optimise the development. Based on one
development scheme (the most appropriate one
based on experience), it seeks to estimate, with an
accuracy of ± 30 to 40 %, the development and
operational costs, and to derive from it values of the
economic indicators, including sensitivities and a list
of risks and uncertainties.
3 Conceptual Studies
• The conceptual study aims at optimising the
development scheme, implying an exhaustive
search of data bases as well as a comparison of
different plausible development schemes, in order
to select the best one in terms of technical
feasibility and final profitability for the Group.
• The conceptual study will compare conventional
development schemes as well as an innovative
scheme.
• The conclusions of the conceptual study shall be
formally validated by all the interested parties,
before moving to the pre-project stage.
4 Pre-Project Studies
• The pre-project study comes after the conceptual
study and before basic engineering .
• The main objective in a pre-project study is to
provide the investors with a basis for making the
development decision.
• the key purpose of a pre-project study is:
• • To technically define the new facilities to be installed in
the coming step of the field development, so that oil or
gas can be produced under conditions meeting Technical
standards for safety, environment and operations
• • To supply technical basis for the next phases of the
considered project (construction, drilling, operation).
Such technical basis are coordinated and validated,
between the Geosciences, Wells and Drilling, Production,
Technology and Construction, Safety and Environment,
and Studies/Planning Divisions
• • To finally enable management to sanction the project.
5 The "Statement of requirements"
(S.O.R.)

Objective :
• The S.O.R. concretises the agreement
between the architect, the operator and the
entity responsible for the realisation of the
Project, regarding the parameters and the
fundamental choices that have been made
for the development.
• The S.O.R. defines the intangible project
data, as well as the optimisation studies to be
performed in the project phase. Any revision
of the S.O.R. is subject to a formal approval
procedure.
DATA COLLECTION
1 GEOGRAPHICAL DATA
• Area map.
• Nature of soil/ground (pre-existing pollution ?).
• Water depth map for any offshore development or offshore
loading terminal.
• Topographical maps for onshore developments
• Environmental data :
 like National Park.
 local environmental regulation (Planning for environmental studies).
 local population (socio-economic aspects).
 other relevant information / constraints (if any).
• Meteo-oceanographic conditions :
 Winds and current (direction, speeds) if available.
 11-year or 50-year wave.
 Water temperature.
• Permit and property boundaries
DATA COLLECTION
2 PETROLEUM AND INDUSTRIAL ENVIRONMENT

• Existence of production installations (on shore) or

nearby platforms (distances).
• Existence of pipelines, loading terminals, facilities to
accomodate associated gas.
Characteristics of these installations (if available) :
Pipe dimension, length, capacity, maximum operating
pressure.
Capacity and availability of production installations.
• Possible access: available capacity, technical tie-in
capacity, cost of utilisation or of transport.
• Size of export tankers.
DATA COLLECTION
3 RESERVOIR DATA
• • Structure map.
• • Reservoir depth and pressure/temperature.
• • Nature of reservoir fluids.
• • API and GOR, contacts if available.
• • Results of exploration wells, if available
(PVT, cores, logs, test, etc.).
• regional data : the characteristics above, the
reservoir production mode and the surface
production methods.
DATA COLLECTION
4 PRODUCTION (EXPLOITATION) CONSTRAINTS

• • Product export constraints (oil and/or

gas).
• • Size of export tankers.
• • Disposal constraints to sea, to ground,
and to air.
• • Constraints regarding use of associated
gas : re-injection, export (or flaring if
permissible).
DATA COLLECTION
5 ECONOMIC DATA

• • Fiscal regime.
• • Amortisation rules
• Inflation and exchange rates.
• • Product sales prices.
• • Hypotheses for user costs (fees) of
existing facilities (pipes, terminals).
 GEOLOGY / RESERVOIR STUDY
EXPECTED RESULTS
• • Geological environment
• • geological model/ size of the structure, reservoir thickness(es)/ petrophysical
characteristics (porosity, saturations, permeabilities )/ natural isolations /
permeability barriers (faults, etc…).
• Quantity of oil/gas in place; P, 2P, and 3P.
• • Principal heterogeneities
• • Reservoir drainage mechanism as function of time.
• • Recoverable reserves.
• • Choice of most probable case.
• • Oil/gas/water production profiles in each case.
• • Number of wells, well architecture (deviated, horizontal, complex) , and well
flowrates (productivities).
• • Well target locations. / Well-reservoir interface (perforations, sand control,
etc.)
• • Requirements regarding water and/or gas injection.
• • Need for artificial lift and implementation date
• Recommendations to improve reservoir knowledge.
CHOICE OF FIELD ARCHITECTURE
EXPECTED RESULTS
• Definition of field architecture (some are only valid
for offshore):
Subsea or dry wellheads.
Number and types of platforms (fixed, floating, etc...),
Well arrangement: isolated or cluster.
Number and types of Central Process Unit (CPU)
Type of terminal.
Product specifications, as a function of time.
Need for, size of export storage
Export system recommendations.
Etc...
 DRILLING/COMPLETION STUDY
EXPECTED RESULTS
• • Drilling programme : well and campaign durations and necessary
number of drilling rigs, based on depth, maximum well deviation,
number of wells and their target locations.
• • Selection of type of drilling rig based on the following criteria ; soil
conditions, water depth, weather/oceanographic conditions.
• • completion design (architecture, metallurgy). Determination of the
wells profile and well performance prediction
• • Drilling and completion costs including mobilisation and
demobilisation.
• • In the case of a compact rig, a tender rig, or a permanent rig :
Weight and footprint of systems installed on the platform.
Utilities requirements.
• • Recommendation on an artificial lift system, if required
• • Recommendation regarding well workovers (frequency, cost,…) and
maintenance (wireline, coiled tubing, snubbing…)
• • Well abandonment
SURFACE INSTALLATIONS STUDY
EXPECTED RESULTS
• 1 Production
• • Oil, gas, and produced water flow-rates.
• • Water and/or gas injection rates.
• 2 Product Characteristics
• • Oil, gas, or sub-products (sulphur, coke, etc...), discharges (to water,
air, etc.).
• 3 Process Scheme
• • Oil/gas/water process scheme (block diagrams / PFD /PID …)
showing the different functional systems and the links between them
: oil/gas separation, oil export, water treatment, etc.
• 4 Weights and footprints of various functional systems
• • Parameters defined as function of capacity.
• 5 Operating Safety and Environmental philosophy
• Fundamental field operation principles, reservoir & wells monitoring,
treatment, control & ESD philosophy, logistic, telecom, and security if
applicable.
SURFACE INSTALLATIONS STUDY
EXPECTED RESULTS
• Process functional systems
Oil/gas separation.
Desalination.
Produced / injection water treatment
Oil metering and export.
Gas compression.
Gas treatment (dehydration, sweetening).
Etc...
• Utilities
Electrical Power.
Cooling water.
Fire water
Quarters.
Etc...
• (Optional) Rough estimate of production personnel requirements
• • Organisational principles.
• • Operations and maintenance personnel.
SURFACE INSTALLATIONS STUDY
EXPECTED RESULTS
• Layouts
• • Based on weight and footprint data.
• • According to Company safety distance specifications
• Onshore installations
Determination of total area required. Preliminary layout, split into process
areas and support buildings, according to fundamental safety criteria.
• Offshore installations
Selection of type of support :
• - fixed jacket, concrete,
• - semi-submersible,
• - production jack-up,
• - FPSO (tanker or barge).
Determination of deck area(s) and weight load per deck.
Construction and installation planning.
• Infield lines
• • Configuration.
• • Piping length for every diameter.
• • Calculation pressure.
• • Material : carbon / stainless (inox) steel.
 SURFACE INSTALLATIONS STUDY
EXPECTED RESULTS
• Oil and gas export lines
• • Diameter.
• • Length.
• • Calculation pressure.
• • Material : carbon / stainless (inox) steel.
• • Construction method (aerial, buried lines, trenched, etc.)
• Loading terminal
• • Onshore storage :
• - Storage capacity and number of storage containers,
• - Dimensions of storage “park”. The essential safety rules.
• • Offshore storage :
• - Dimensions of storage tanker, or of submarine storage.
• - Type of loading system (CALM, SALM, etc...).
DEVELOPMENT COST AND PLANNING
1 NECESSARY DATA
• • General data :
 Geographical and meteo/oceanographic data
 Petroleum / industrial environment.
• • Results of studies as given below :
Field architecture : number of platforms and number / type of
wells ().
Drilling and completions.
Surface installations :
 - Systems sizes and weights,
 - Type and size of platform,
 - Definition of infield lines (length and diameter),
 - Definition of export lines (length and diameter),
Loading terminal.
Storage volumes (tanks or tanker).
Type of terminal.
Export system.
DEVELOPMENT COST AND PLANNING
EXPECTED RESULTS
• 1 Investment costs with breakdown
• • drillings and completion costs,
• • installed substructure costs,
• • surface facility (topsides) costs,
• • pipelines costs,
• • terminal costs,
• • contingencies,
• • E.M.S. costs (engineering, management, supervision, commissioning,
insurance).
• 2 Production costs
• • PRE-OPEX (recruitment, personnel training, spare parts for two years,
building rental, studies).
• • OPEX, including:
local and expatriate personnel, for subsea production, surface facilities, terminals,
logistics, maintenance, safety, support functions; local company costs with finance/
administration costs
consumables
well workovers
 DEVELOPMENT COST AND PLANNING
EXPECTED RESULTS
• Other Costs / Data
• • During Exploration /Appraisal Period
Explo (if any) and appraisal (wells and seismic) costs
Study costs (G&G and reservoir studies during appraisal)
Local Company office cost during E&A period
Negotiation cost before contract signature
• • Export Conditions
Export / transit fees to sales point
Quality (value) adjustment
• • Abandonment Cost
• Sensitivity
• • Cost for possible alternative development schemes.
• • Estimation of investment cost range for reasonable ranges of the
basic input data (reserves, well productivities, etc...).
• Preparation of planning and payment schedule
ECONOMIC EVALUATION
• NECESSARY DATA
• • Results of cost estimate studies, in particular :
 Investment schedule and operating costs.
 Production profile.
• EXPECTED RESULTS
• • Internal Rate of return (IRR). = Montant du profit gagné
sur une période donnée exprimé en % du coût initial.
• • Net present Value (NPV).
• • Pay-out. = Temps mis pour payer l’investissement
• • Cash flow and discounted cash flow (by year and
cumulative).
• • sensitivities (on production profile, investment).
SYNTHESIS AND CONCLUSIONS
• This document summarises the study and
presents it’s conclusions, in technical and in
economical terms. It also presents
recommendations for further action.
• Summary:
• Study Objective.
• Basic input data.
• Comparisons/optimisations.
• Technical conclusions.
• Costs ; economics results
• Planning.
• Main risks and uncertainties.
• Recommendations.
ECONOMIC EVALUATION
EXPECTED RESULTS

DECISION OF
GO / NO GO